Stock Market Update

[BRIEFING.COM] The S&P 500 (-0.2%), Nasdaq Composite (-0.3%), and DJIA (-0.4%) sit modestly lower shortly after midday, with developments on the geopolitical front driving several considerable swings.

Stocks opened to broad losses after President Trump gave an address regarding Iran last night, in which he signaled the U.S. will continue military operations and "send them back to the stone age." The rhetoric clashed with the recent ceasefire optimism theme that drove stocks higher over the previous two sessions and sent oil prices sharply higher, with WTI crude oil currently up $10.91 (+10.9%) to $111.03 per barrel.

After facing opening losses of 1.0% or wider, the major averages made a sharp move to their flatlines about an hour into the session after Bloomberg reported that Iran and Oman are drafting a proposal regarding traffic through the Strait of Hormuz. Crude oil came down a few dollars in the initial reaction to the headline but remains sharply higher for the day.

Meanwhile, the major averages now trade in a relatively stable range just below their flatlines. Outside of the geopolitical volatility, it has been a somewhat quiet session ahead of tomorrow's holiday closure, though there are still a few notable moves at the sector level.

The consumer discretionary sector (-1.3%) was among the early laggards as mega-cap and tech names opened lower, and it remains firmly lower despite the intraday bounce. The sector faces poor leadership from Tesla (TSLA 364.10, -17.16, -4.50%), which is among the worst-performing S&P 500 names after its Q1 deliveries fell short of expectations.

Elsewhere in the sector, NIKE (NKE 43.78, -0.84, -1.89%) has not yet garnered any buy-the-dip interest after it shed 15% yesterday following its earnings release.

The information technology (+0.2%) sector also opened with a loss wider than 1.0%, but now trades modestly higher. Ciena (CIEN 446.97, +31.58, +7.60%) and Lumentum (LITE 801.59, +36.94, +4.83%) are the best-performing S&P 500 components, while strength across major chipmaker and software names is mixed.

Elsewhere, the energy sector (+0.2%) opened to a gain that exceeded 2.3%, though it has since surrendered the bulk of the early strength.

Outside of the S&P 500, the Russell 2000 (+0.3%) and S&P Mid Cap 400 (-0.2%) are little changed from their baselines after following a similar path to that of the major averages.

Overall, the market now appears to be drifting, with investors reluctant to take on additional risk ahead of the holiday and ongoing uncertainty surrounding developments in the Middle East.

Reviewing today's data:

• Weekly Initial Claims 202K (Briefing.com consensus 215; Prior was revised to 211K from 210K, Weekly Continuing Claims 1.841 mln; Prior was revised to 1.816 mln from 1.819 mln
  
  • The key takeaway from the report is that initial claims remain near the 200,000 mark, reflecting a low-firing environment.
• February Trade Balance -$57.3 bln (Briefing.com consensus -$55.8 bln); Prior was revised to -$54.7 bln from -$54.5 bln
  
  • The key takeaway from the report is that February imports grew more than exports even though February nonfuel import prices (+1.1%) increased at a slower pace than non-agricultural export prices (+1.7%).